Just like their peers in advanced economies, monetary policymakers across Sub-Saharan Africa have turned more hawkish recently. Central banks in South Africa and Nigeria hiked interest rates aggressively this month. Reining in inflation is clearly the top priority, but we suspect MPC members also had on eye on shoring up currencies, which have come under renewed pressure. Concerns about high inflation, currency weakness and mounting balance of payments strains are likely to prompt sizeable interest rate hikes in upcoming meetings elsewhere too, most notably in Ghana and Kenya. One key exception is Angola, where the flipside to this story is playing out. The central bank cut interest rates this month as inflation continued to ease on the back of the currency’s oil-linked rally.
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